The resilience of the Cypriot economy and a strong labour market continue to support lending activity, despite uncertainty stemming from the conflict involving the US, Israel and Iran.
Both households and businesses are increasingly turning to banks to finance investment and spending plans.
According to figures released by the Central Bank on Monday, total loans recorded a net increase of €260.3 million in May 2026, compared with a net increase of €40.5 million in April 2026 and €116.8 million in May 2025.
The annual growth rate of total lending rose to 12.6%, up from 12.0% in April 2026 and 5.1% in May 2025.
Outstanding loans reached €28.1 billion in May, compared with €27.8 billion a month earlier and €25.7 billion in May last year.
Loans to Cyprus residents increased by €173.7 million, compared with a rise of €76.1 million in April.
Breaking down the figures:
- Household lending increased by €52.7 million, following a decline of €12.1 million in April.
- Lending to non-financial corporations rose by €63 million, compared with €71.7 million the previous month.
- Lending to other domestic sectors increased by €58 million.
Lending survey
According to the latest Central Bank lending survey, net demand for loans increased during the first quarter of 2026 from both businesses and households.
The survey found that demand for business loans rose primarily to finance fixed investment projects.
Among households, stronger demand for mortgage loans was attributed to improving consumer confidence, while demand for consumer and other loans increased due to higher spending on durable goods and greater confidence among consumers.
“The observed increase in loan demand, particularly from businesses for fixed investments and from households for consumption and housing, may be linked to the continued resilience and adaptability of the Cypriot economy amid ongoing external uncertainty, as well as the sustained strength of the labour market,” the Central Bank said in its analysis of the findings.
The survey also highlighted continued credit expansion in the housing sector during the first quarter of 2026, reflecting the resilience of the property market and positive household intentions regarding housing investment.
Deposits also rise
Deposits also recorded strong growth.
Total deposits increased by €343.8 million in May 2026, compared with a net decrease of €123.1 million in April.
The annual growth rate of total deposits reached 5.1%, up from 4.5% in April 2026. A year earlier, the rate stood at 5.8%.
Outstanding deposits reached €58 billion, compared with €57.6 billion in April and €56.1 billion in May 2025.
Deposits from Cyprus residents rose by €239 million, compared with an increase of €30.1 million in April and €24.6 million in May last year.
Within that:
- Household deposits increased by €171.3 million, up from €122.6 million in April.
- Deposits from non-financial corporations rose by €194 million, compared with €63 million the previous month.
- Deposits from other domestic sectors declined by €126.2 million overall.
Deposits from residents of other EU member states increased by €17.2 million, compared with a decline of €103.1 million in April, while deposits from third-country residents rose by €87.6 million, compared with a decrease of €50.1 million a month earlier.
